Payments of $100,000 and $150,000 Are Due to Be Paid

question 237

Multiple Choice

Payments of $100,000 and $150,000 are due to be paid in 45 days and 75 days respectively. If money is worth 7.3%, what is the combined economic value today of the two payments?

• A) $574,734
• B) $246,891
• C) $249,452
• D) $276,519
• E) $229,567

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Definitions:

Sales Revenue Approach

A method used in accounting to calculate revenue based on the total value of goods or services sold.

Bad Debts Expense

An expense account reflecting the cost of accounts receivable that a company does not expect to collect, thus written off as a loss.

Uncollectible Accounts

Refers to receivables that a company has deemed unrecoverable and is unlikely to collect.

Financial Reports

These are formal records of the financial activities and condition of a business, person, or other entity, providing an overview of a company's financial performance and financial position in both short and long term.